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Why DTC spending will decrease in 2017

KEY TAKEAWAY: The biggest reason for the projected “flat spending” in DTD advertising is due to the simple fact that there aren’t going to be and new products that are intended to be targeted towards big audiences. Drugs in development are specialty drugs and as thus they will require targeted marketing to reach their audience.

Another big pharma client informed us, yesterday, that they were going to cut their DTC in 2017 by 20-30%. “We don’t have a portfolio that warrants an investment in any new DTC initiatives” the marketing VP said. The ad agency people in attendance I think were the most shocked, but it’s consistent with what we heard at other clients.

By far the biggest investment in new drugs is in the area of oncology, but today a majority of drug companies are not sold on the value of DTC marketing for cancer drugs. Diabetes drugs are battling it out on TV, but the insurers are having a bigger say about what drugs can and should be prescribed.

The days of $200 million DTC launches may be over but that’s not a reason to believe that DTC marketing can’t be effective in driving demand. DTC marketers first have to drive awareness, which is usually done via TV, but the disconnect seems to be connecting the line between awareness and an Rx. As another client told us “today patients have a lot of choices when it comes to treatment options and in some cases it’s coming down to price and awareness”. Welcome to marketing.

What we have also found is that too many pharma companies ee digital marketing as a “black hole” of spending. They are unsure how to prioritize digital marketing buckets and as a result, their websites often suffer with a lack of testing and research. We recently advised one client to cut their search marketing budget by half and invest the money on the online branding experience to which they replied “what does that mean?”. Ouch.

Some consumer marketers are having the same thoughts, especially with the decline in TV ratings for the NFL. In short, it means that marketers are going to have to start thinking like consumers instead of marketers and ask “where and how can I reach my audience?”.